The manufacturing growth slowed sharply in November after demonetisation but stills remains in the positive territory, according to a monthly survey.
Meanwhile, Maruti Suzuki India, Volkswagen, Toyota and Renault posted double digit sales growth in November despite fears that demonetisation will hit consumer sentiments.
The wholesale auto figures which are first to be announced every month give an indication about the pulse of the economy.
Some analysts said that a part of the reason for double digit growth in auto sales may also be due to past waiting period of some popular car models and one will have to wait for one more month to see if the growth slows down. Mahindra, Ford and Honda saw sales drop in November.
The Nikkei Markit India Manufacturing Purchasing Managers’ Index (PMI) — a gauge of manufacturing performance — fell to 52.3, down from a 22-month high of 54.4 in October.
Any figure above 50 indicates expansion, while a score below this level means contraction in factory output. “PMI data for November showed that the sudden withdrawal of high-value banknotes in India caused problems for manufacturers, as cash shortages hampered growth of new work, buying activity and production,” said Pollyanna De Lima, economist at IHS Markit and author of the report.
November data still marked the 11th consecutive monthly improvement in manufacturing conditions across India.
